I have posted now and again on my plans to hand my now 18 and 20 year old children (in smallish pieces, over about 5 years) the money we had saved for their college education. This is because they chose no-cost options. I have not really received any comments on this plan, though I would welcome some. Good idea? Bad?
The other day, I mentioned in a comment on Funny About Money's blog (see Blogroll to the right for a link to her fabulous blog), that, as my wants are kind of low at the moment, I plan to help my children out later when they want to buy houses. Funny's response: SDXB reflects that middle-class children never grow up: we continue to nurture them psychologically and financially in perpetuity.
SDXB (aka Semi-Demi-Ex-Boyfriend, for those who are not FAM aficionados) is echoing the advice of Thomas Stanley and William Danko, authors of The Millionaire Next Door. They call the giving of money to adult children "economic outpatient care," and note that, generally, parents who do this "weaken the weak." Children who receive EOC are (relative to their peers) low-producers. I have certainly seen this weakening effect among people of my acquaintance.
Of course I LOVE The Millionaire Next Door. I remember reading it for the first time, seeing a question along the lines of What are the three characteristics of millionaires? I turned the page to see this: FRUGAL FRUGAL FRUGAL. I was so happy, especially since this was in the big-spending 90s, when the laws of saving and frugality didn't seem to apply.
So on one side there are Stanley and Danko, whose arguments are backed up by research. And I do despise the sense of entitlement of many (most?) of my peers and their children.
But here's the other side. I keep feeling that kids now are--sometimes because of the example set by parents--starting out behind. I read an article stating that students have NEVER graduated with the amount of education debt common today. In days of yore, parents who could afford it gave children a head-start--with a dowry, a piece of land, a goat.
Now people enter adult life with mounds of debt that will take years and years to pay off. Remember: college financial aid officers and the media have been declaring for years that "education debt is GOOD debt." Is this really "good"? And the lending has been "privatized," with our government guaranteeing the loans for the private lenders. And the lending has rules so complex that I cannot understand them, like the one that says that you can only consolidate or refinance your loans once, no matter how much interest rates may go down.
I'm getting out of my element here, so I had better stop. But here's my question: does all financial help weaken the recipient? Are kids starting out "behind" compared to how they started out in a perhaps mythical past? Help!!